Honda Starts Construction of New Transmission Plant in Mexico

Joined by government and community officials, associates at Honda de Mexico, S.A. de C.V. (HDM) today celebrated the start of construction of a new Honda transmission plant in Celaya, near the City of Guanajuato. The new plant will be located adjacent to the new automobile plant that will begin mass production early next year of the all-new 2015 Honda Fit.

With an initial investment of US$470 million, the transmission plant will begin producing continuously variable transmissions (CVTs) in the second half of 2015 with an initial annual production capacity of 350,000 units. Honda plans to more than double annual output of CVTs produced in Celaya to approximately 700,000 annually in the coming years, when employment is expected to reach 1,500 new associates. In addition to supporting HDM auto production, the plant will provide transmissions to Honda auto plants outside Mexico.

"Our ability to begin operations would be impossible without the enthusiasm and support of the community, and I want to thank the state and federal governments for their efforts to help ensure the success of our operations," said Tetsuo Iwamura, COO of Honda North American Regional Operations."With the growing skills of our new associates in Mexico we are establishing a new production base that will achieve outstanding global competitiveness."

The ceremony concluded with placement of a first stone for the building's foundation, officially signifying the start of the transmission plant building's construction.

By establishing a production base for CVT manufacturing in the same location as the new $800 million automobile plant, Honda de Mexico will operate a highly efficient production structure that maximizes local content in Mexico, the rest of North America and globally. Honda will employ approximately 4,700 associates in Celaya when the auto, engine and transmission plants are in full operation.

The CVT transmissions to be produced in Celaya are part of Honda's Earth Dreams™ Technology series that achieve both sporty performance and a high level of fuel efficiency. In this way, they meet both the needs of customers and society. The new transmission plant in Mexico will join existing Honda transmission manufacturing operations in Ohio and Georgia, increasing Honda's annual transmission production capacity in North America from the current 1.375 million units to more than 1.7 million units in 2016, and to more than 2 million units when the Mexican plant reaches full capacity.

Honda established its first Mexican manufacturing operations in September 1985. Two years later, Honda de Mexico started motorcycle import sales and, in March 1988, began production of motorcycle products and automobile service parts in El Salto, Jalisco. Automobile production began in 1995 with the Accord and, in 2007, production switched to the CR-V. The auto plant in El Salto has an annual capacity to produce 63,000 automobiles.

With the new 200,000-unit Celaya automobile plant scheduled to begin operation early next year, Honda de Mexico's annual production capacity will increase to a total of 263,000 units. In 2012, Honda sold 54,000 units in Mexico (up more than 150% from 2011), with sales volume steadily increasing.

With the production start-up of the new Fit in Mexico next year, Honda in North America will be manufacturing automobiles for all sales segments, from sub-compact to light truck models. In addition to expanding capacity, Honda is introducing the company's Earth Dreams Technology powertrains to provide customers with exceptional performance and fuel efficiency in Honda and Acura products.

In the last three years, Honda has announced investments in North America totaling nearly $2.7 billion for the innovation and expansion of its operations, including $1.27 billion for the new plants in Celaya.

About Honda
Honda established operations in America in 1959, and now employs more than 33,000 associates in its North American sales, R&D and manufacturing operations with a capital investment of more than $22 billion.

Based on Honda's approach of "building products close to the customer" Honda started local production of motorcycles in the U.S. in September 1979. In November 1982, Honda became the first Japanese automaker to produce automobiles in the U.S.

Today, seven Honda auto plants in the North American region, including four in the U.S., have an annual capacity of 1.63 million automobiles. In 2012, 90 percent of the Honda and Acura automobiles sold in the U.S. were produced in North America. Annual capacity will increase to 1.92 million vehicles per year in 2014, with the sales percentage of locally produced automobiles expected to rise to more than 95 percent. Honda's cumulative production of automobiles in North America is now more than 25 million units.

Honda operates 14 major manufacturing facilities in North America, producing a wide range of Honda and Acura automobiles, automobile engines and transmissions, Honda all-terrain vehicles, and power equipment products such as lawn mowers, mini-tillers and general purpose engines, using domestic and globally sourced parts.